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Getting Your Home Care Agency Off to a Successful Start, Part 3: Systematizing Your Internal Operations

Now that you have determined the business structure of your home care agency and identified the lines of business to be provided, systematizing internal operations is your next step in building value for your home care agency. A solid infrastructure reduces expenses, creates efficiencies, and allows you to deliver exceptional care to your clients.

One of the more important internal operations elements is the software your home care agency selects to run the core functions of the business. Since this is a costly item, software selection is critical to the current and future value of the agency. A robust and powerful software should first of all have at its core a solid scheduling component that is linked to the client and the caregiver profiles, thus making matching caregiver to client faster and easier. Additionally, the software should accommodate a telephony component so that task or duty sheets and payroll and billing can be accomplished in one activity. The capacity, ease of use and productiveness of the software provides additional value to the company.

The software expenditure, however, can be nullified as a value to your home care agency if it is not used the way it is designed. Too often we go into agencies to do a due diligence for sale or purchase and find they have an excellent software product, but staff is doing “workarounds” because they want data or information in a different format. Workarounds are costly because they siphon off staff time that could be more appropriately used in other functions that are critical to the agency’s financial health. With the elimination of workarounds, clerical positions may be eliminated with considerable cost savings to the agency. Therefore, I highly recommend that you do not allow workarounds to exist. If a report is needed or data delivered in a different manner, discuss this with your software vendor.

Another basic infrastructure element is the makeup of your management team. The people you have in decision-making positions can either add or detract from the value of your home care agency. When a potential buyer looks at the company, they look at the human assets as well. The assessment of the human assets includes determining who has the decision-making responsibilities and how free the different positions are to make the decisions related to their areas of responsibility without owner oversight. Frequently, we find that the owner has retained the majority of the critical decision making. This is perceived as a deficit in value because when the owner sells, there is no one left in the agency with experience in making those decisions. Invest in your managers and give them decision-making authority over their areas of responsibility. Ultimately, this makes your home care agency more valuable.

Other important elements of your infrastructure are the payroll, billing and scheduling systems. If you have selected software with point-of-care capabilities and telephony, most of this will be accomplished electronically. This does not mean, however, that there does not need to be systems that validate the data. Data entered incorrectly or set up wrong, can create both billing and payroll errors. Most software systems have validation systems built into them. An effective software system includes validation systems.

To support your billing system, you’ll want a collection process. An ideal goal for accounts receivable will be no more than 45 days. To deliver on your accounts’ receivable metric – and keep your cash flow strong – you want an aggressive collections system with well trained billers and collection staff. An agency with extended accounts receivable is considered of less value due to missing basic fundamentals.

Finally, your intake process that receives requests for services and converts them to actual cases can make or break your agency. As a result, this particular position and the success of the person(s) filling this role are critical to your home care agency success and its value. Besides carefully selecting the intake individual, it will be important to provide ongoing continuing education on customer service, agency services and successful outcomes that the intake staff can use when selling the services of the agency to prospective customers. With a successful intake department and a system of continuing staff education, the value of your home care agency goes up.

Developing a solid infrastructure can be daunting and seem overwhelming, particularly when you are trying to manage all the day-to-day events that impact an agency. If you are struggling with development of your infrastructure for either your Medicare or your private duty agency and are not sure where to begin, contact us for a free 30-minute consultation. We’re always happy to lend a hand.

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